We see “Amazon can’t beat this one” ads every now and again for retailers — that was part of Oxford Club’s push for Planet Fitness earlier this week, for example — but this one is generating quite a few questions… and I haven’t written about one of Hilary Kramer’s ads for a while, so it floats to the top of the slurry pile.
Here’s how the email caught our eye…
“What’s the one thing the world’s richest man—Amazon’s CEO Jeff Bezos—is completely freaking out over?
“It’s a Big Box retailer… and the one competitor Amazon can’t crush.
“Its business model can’t be taken online and undercut by Bezos and his company.
“And its earnings are growing 5X faster than Amazon’s.”
I’m guessing Mr. Bezos is not exactly “freaking out” about anything these days — but, of course, we still want to know which big box retailer Kramer is pitching, and whether it really stands out as being “Amazon-proof.”
And better yet, we’re also told that these shares are “bargain priced” because they’re 20% off their highs (lots of stocks are “bargains” if that’s your criteria, but we’ll suspend our disbelief until we figure out the name).
The ad itself even has a cute little “Star Wars” style headline…
“The Big Box Strikes Back: Revenge of the Retailer”
So, assuming you’re not hankering to hand over $99.95 to Eagle Financial for your subscription to GameChangers (to be auto-renewed at “the prevailing rate… which seems to be $249 at the moment”), let’s check out the clues and see what we can learn for you…
“This disruptive retailer has a temporary low price, because they’re financing a massive expansion… one that will triple their number of stores, preparing them for Netflix or Apple-like growth.
“But paying for that expansion cuts into short-term profits. So its price is briefly down… creating a ground-floor opportunity for an explosive profit-push in the near future.”
Retailers have a hard time ever seeing “Netflix-like growth,” of course, because they have costs that march higher right with their revenues… but they can certainly show nice growth, particularly if they’re in the midst of a long expansion surge and can finance that expansion without crippling their operating results. So we can hope… but let’s get some more clues first:
Kramer also cites some other sources, including Seeking Alpha (which, of course, is an essentially un-edited blogging platform these days… arguably better than Forbes.com, but so huge that you can find support for any opinion you wish in their pages) and, more promisingly, Barron’s… here’s the quote from Barron’s that she offers:
“… its stock offers a second chance to get in on the bottom floor of a compelling growth story.”
And apparently the Hodges funds are enthusiastic shareholders — more from the ad: